A National Association of Insurance Commissioners' task force will collect data from several insurers over the coming weeks as part of its effort to establish a uniform long-term care rate review process.
The Long‐Term Care Insurance Task Force is charged with developing a "consistent national
approach for reviewing long‐term care insurance rates that results in actuarially appropriate increases being granted by the states in a timely manner and eliminates cross‐state rate subsidization."
As part of that effort, the NAIC is spending $110,000 to contract with a consultant to collect the data from 19 insurers operating in states that include Texas, Virginia, Nebraska, Utah and Minnesota.
Comments are being accepted on the data-collection proposal until Jan. 28 and can be sent via email to to [email protected]
The NAIC developed a request for proposals for the data collection in November and sent it to 12 firms, the association said. A firm is expected to be selected in mid-February, the NAIC said.
"The selected firm will be asked to review, analyze, and offer suggested improvements to the draft data call and instructions developed by the regulators," the fiscal impact statement for the contract reads. "The consulting firm will then conduct the data call and accumulate, analyze, and describe to the NAIC Members the current level of rate inequity among states’ policyholders."
A popular product in the 1990s, LTCi was badly underpriced. Many insurers sought, and continue to seek, significant rate hikes to stabilize their books.
For example, Blue Cross Blue Shield of Florida policyholders were notified last winter that annual premiums for their coverage will increase by an average of 94 percent through 2021.
The company originally requested a 280 percent hike but state regulators refused to grant that, telling the company the request was not "adequately demonstrated to be reasonable in relation to the benefits provided," according to a consent order by the state Office of Insurance Regulation.
While many insurers got out of the LTCi business, others are back as the baby boomer population ages and long-term care hedging demand remains strong.
The NAIC established the task force one year ago to tackle the pricing issue.
The uniform rate hike proposal is relatively simple: streamline the LTCi rate review process so multiple state insurance departments are not duplicating the same work, while insurers are not answering the same questions over and over. Time and money would be saved and a uniformity would emerge over time.
NAIC developed a similar uniform process for market conduct and other financial examinations.
A second part of the task force's charge is to "identify options to provide consumers choice regarding modifications to long-term care insurance contract benefits where policies are no longer affordable due to rate increases."
The task force is to deliver a proposal to the Executive Committee by the 2020 Fall National Meeting. Unless otherwise extended or modified by the Executive Committee, the task force and its charges will expire Jan. 31, 2021.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.
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